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Tod’s Group reported a 62.7 per cent jump in operating profit to €94.7 million in 2023 thanks to improved efficiency in its logistics and distribution, alongside double-digit revenue growth across all four of its brands (Tod’s, Roger Vivier, Hogan and Fay). It comes as the company prepares to delist from the stock market through a deal with L Catterton, in a bid to accelerate its turnaround.
As reported in its preliminary results in January, revenues at Tod’s Group were up 11.9 per cent year-on-year to €1.13 billion in 2023, driven by a strong performance in China and the retail channel. By brand, Tod’s grew by 10.4 per cent, Roger Vivier by 16.5 per cent, Hogan by 9.3 per cent and Fay by 13.2 per cent. (It remains to be seen what impact the change in creative direction at Tod’s will have on sales.)
The luxury sector has delivered a mixed bag of results for 2023 after demand fluctuated in several global markets. Italian brand Brunello Cucinelli defied the wider slowdown, reporting a 23.9 per cent rise in full-year sales, while Prada Group’s sales were up 17 per cent. However, Ferragamo reported a 7.6 per cent fall in sales and a 43.7 per cent drop in operating profit.
“Tod’s has been outperforming the industry in 2023 in terms of top line growth. This has come on the back of more compelling products, more effective marketing, and easier comps,” says Bernstein senior analyst Luca Solca.
Tod’s Group said sales in Greater China performed well, up 24.2 per cent year-on-year, as the market gradually recovers from the lingering impact of Covid restrictions. Europe grew 10.5 per cent thanks to both local demand and tourist purchases, while the Americas nudged up 3.5 per cent. Retail channels were up 13.2 per cent compared to wholesale’s 8.1 per cent growth.
Last month, Tod’s entered a deal with LVMH-backed private equity firm L Catterton that will enable the brand to delist from the Milan Stock Exchange after more than two decades. Once the deal completes, L Catterton will control a 36 per cent stake in the business, while the Della Valle family will retain 54 per cent.
“We are very pleased to have achieved our yearly targets, even within a challenging international macroeconomic environment. These results confirm the goodness of the strategy we are following to make our products increasingly special, of great quality and very desirable,” said group chairman and CEO Diego Della Valle in a statement accompanying the results. “The next few years will see us committed to the consolidation of individual brands, and this is also why we felt [it] strategically important to share this project with the L Catterton investment firm by leaving the stock exchange, an institution with which we have always had excellent relations.”
This article has been updated with a comment from Luca Solca. (13/3)
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